Question 1

Table 12-1
 
-Refer to Table 12-1.The marginal product of the fourth unit of labour is

Accepted Answer

A)  300.
B)  75.
C)  60.
D)  15.E) C) and D)
F) None of the above

Question 2

Which of the following describes a difference between the marginal product of labour and the marginal revenue product of labour?

Accepted Answer

A)  The marginal product of labour declines as each additional worker is hired because of the law of diminishing returns.The marginal revenue product of labour declines as each additional worker is hired because of diseconomies of scale.
B)  The marginal product of labour declines as each additional worker is hired because of the law of diminishing returns.The marginal revenue product increases as each additional worker is hired because of increases in the productivity of labour.
C)  The marginal product of labour is inelastic.The marginal revenue product of labour is elastic.
D)  The marginal product of labour measures the change in output as additional workers are hired.The marginal revenue product measures the change in revenue as additional workers are hired.E) C) and D)
F) B) and C)

Question 3

Figure 12-4 0? A) The income effect is larger than the substitution effect. B) The substitution effect is larger than the income effect. C) The income effect and the substitution effect are equal. D) The supply curve is positively sloped." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 12-4.Which of the following is true at W0?

Accepted Answer

A)  The income effect is larger than the substitution effect.
B)  The substitution effect is larger than the income effect.
C)  The income effect and the substitution effect are equal.
D)  The supply curve is positively sloped.E) None of the above
F) B) and C)

Question 4

Customer discrimination occurs when

Accepted Answer

A)  a firm pays workers different wages based on irrelevant factors.
B)  customers refuse to buy products produced by a racially diverse workforce.
C)  customers refuse to buy products they believe to be of poor quality.
D)  workers refuse to serve customers of a different race.E) A) and B)
F) A) and C)

Question 5

What is personnel economics?

Accepted Answer

Personnel economics is the app...

Question 6

Despite evidence that companies will find it more profitable to use a commission system of compensation rather than a salary system,many companies continue to pay their workers salaries.Which of the following is one reason why firms choose a salary system?

Accepted Answer

A)  Most business owners and managers are not trained economists;therefore,they are unaware of the research that shows a commission system is more profitable than a salary system.
B)  Firms often use salary systems to overcome their principal-agent problems.
C)  Firms that have salary systems do not have to use compensating differentials to attract employees to do hazardous jobs.
D)  Many workers dislike risk and prefer to be paid a salary rather than to be paid by commission.E) B) and D)
F) A) and D)

Question 7

The application of economic analysis to human resources issues is called

Accepted Answer

A)  resource economics.
B)  personnel economics.
C)  human economics.
D)  labour economics.E) A) and C)
F) A) and B)

Question 8

The wage rate is the opportunity cost of

Accepted Answer

A)  working.
B)  working overtime.
C)  leisure.
D)  consumption.E) A) and B)
F) A) and D)

Question 9

Table 12-2
 
-Refer to Table 12-2.The marginal profit from hiring the second unit of labour is

Accepted Answer

A)  $4200.
B)  $1960.
C)  $1800.
D)  $1450.E) B) and D)
F) A) and B)

Question 10

At low wages,the labour supply curve for most people slopes upward because

Accepted Answer

A)  the supply of labour is perfectly inelastic at low wages.
B)  as wages increase,the opportunity cost of leisure increases.
C)  as wages increase,income also increases unless hours worked decrease.
D)  the demand for labour is perfectly elastic at low wages.E) None of the above
F) A) and B)

Question 11

a.What are the two effects of an increase in the wage rate on an individual's labour supply decision? Briefly explain each effect.
b.Explain how a labour supply curve could be backward-bending.

Accepted Answer

a.There are two effects of a wage rate increase: a substitution effect and an income effect.The substitution effect raises the price of leisure,which causes a worker to consume less leisure and supply more labour.Since leisure is a normal good,the income effect leads the worker to choose more leisure and supply less labour.
b.When the wage rate is low,an increase in the wage rate leads to an increase in the quantity of labour supplied because the substitution effect is greater than the income effect.Therefore,the labour supply curve slopes upward.When the wage rate is high,the income effect may be greater than the substitution effect.If this is so,the quantity of labour supplied will decrease as the wage increases and the labour supply curve would be backward-bending.

Question 12

The marginal revenue product of labour is defined as

Accepted Answer

A)  the change in the firm's revenue as a result of selling one more unit of output.
B)  the change in the firm's output as a result of hiring one more worker.
C)  the change in the firm's profit as a result of hiring one more worker.
D)  the change in the firm's revenue as a result of hiring one more worker.E) B) and C)
F) All of the above

Question 13

Most economists believe that a small amount of the gap between the wages of white males and the wages of other groups is due to discrimination.Which of the following factors is not another factor that explains part of this gap?

Accepted Answer

A)  differences in education
B)  geographic location
C)  differences in experience
D)  differing preferences for jobsE) None of the above
F) A) and B)

Question 14

Compensating differentials are associated most closely with which of the following?

Accepted Answer

A)  hazardous jobs
B)  comparable worth
C)  economic discrimination
D)  differences in educationE) B) and C)
F) None of the above A

Question 15

The most important factor contributing to wage differences in the labour market is differences in the level of education and training among workers.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a reason why some firms do not use commission pay?

Accepted Answer

A)  It gives workers incentive to produce more.
B)  It increases firm profits.
C)  It is difficult to measure the output and attribute output to a particular worker.
D)  The best workers stay and less productive workers leave.E) A) and C)
F) B) and D)

Question 17

The marginal productivity theory of income distribution was developed by

Accepted Answer

A)  Edward Lazear.
B)  George Akerlof.
C)  William Stanley Jevons.
D)  John Bates Clark.E) B) and C)
F) All of the above

Question 18

How will an increase in population affect the labour market?

Accepted Answer

A)  It will shift the market supply curve.
B)  It will cause a decrease in the quantity of labour demanded.
C)  It will increase the supply of jobs.
D)  It will increase the opportunity cost of leisure.E) A) and B)
F) A) and C)

Question 19

Table 12-4
 L and MRPL refer to the marginal product of labour and the marginal revenue product of labour,respectively. -Refer to Table 12-4.What are the quantity of labour and marginal revenue product of labour that will maximise the profit Apple would earn from selling iPods? A) 2;$160 B) 3;$340 C) 2;$680 D) 3;$140" class="answers-bank-image d-inline" rel="preload" > Table 12-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker,so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labour and the marginal revenue product of labour,respectively.
-Refer to Table 12-4.What are the quantity of labour and marginal revenue product of labour that will maximise the profit Apple would earn from selling iPods?

Accepted Answer

A)  2;$160
B)  3;$340
C)  2;$680
D)  3;$140E) B) and C)
F) A) and D) C

Question 20

What is the difference between a firm's marginal revenue and its marginal revenue product?

Accepted Answer

A)  Marginal revenue is the change in sales revenue from selling one more unit of output,while marginal revenue product is the profit earned from hiring one more worker.
B)  Marginal revenue is the change in sales revenue from selling one more unit of output,while marginal revenue product is the change in total revenue from hiring one more worker.
C)  Marginal revenue is the increase in revenue when a firm raises its output price,while marginal revenue product is the increase in marginal product when a firm hires an additional worker.
D)  There is no difference between the two terms.E) All of the above
F) B) and D)

Exam 12: The Markets for Labour and Other Factors of Production

Table 12-1 -Refer to Table 12-1.The marginal product of the fourth unit of labour is

Correct Answer
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Which of the following describes a difference between the marginal product of labour and the marginal revenue product of labour?

Correct Answer
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Figure 12-4 -Refer to Figure 12-4.Which of the following is true at W₀?

Correct Answer
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Customer discrimination occurs when

Correct Answer
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What is personnel economics?

Correct Answer
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Personnel economics is the app...
View Answer

Despite evidence that companies will find it more profitable to use a commission system of compensation rather than a salary system,many companies continue to pay their workers salaries.Which of the following is one reason why firms choose a salary system?

Correct Answer
verified

The application of economic analysis to human resources issues is called

Correct Answer
verified

The wage rate is the opportunity cost of

Correct Answer
verified

Table 12-2 -Refer to Table 12-2.The marginal profit from hiring the second unit of labour is

Correct Answer
verified

At low wages,the labour supply curve for most people slopes upward because

Correct Answer
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a.What are the two effects of an increase in the wage rate on an individual's labour supply decision? Briefly explain each effect. b.Explain how a labour supply curve could be backward-bending.

The marginal revenue product of labour is defined as

Correct Answer
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Most economists believe that a small amount of the gap between the wages of white males and the wages of other groups is due to discrimination.Which of the following factors is not another factor that explains part of this gap?

Correct Answer
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Compensating differentials are associated most closely with which of the following?

Correct Answer
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A

The most important factor contributing to wage differences in the labour market is differences in the level of education and training among workers.

Correct Answer
verified

Which of the following is a reason why some firms do not use commission pay?

Correct Answer
verified

The marginal productivity theory of income distribution was developed by

Correct Answer
verified

How will an increase in population affect the labour market?

Correct Answer
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C

What is the difference between a firm's marginal revenue and its marginal revenue product?

Correct Answer
verified

Exam 12: The Markets for Labour and Other Factors of Production

Table 12-1 -Refer to Table 12-1.The marginal product of the fourth unit of labour is

Correct AnswerverifiedShow Answer

Which of the following describes a difference between the marginal product of labour and the marginal revenue product of labour?

Correct AnswerverifiedShow Answer

Figure 12-4 -Refer to Figure 12-4.Which of the following is true at W0?

Correct AnswerverifiedShow Answer

Customer discrimination occurs when

Correct AnswerverifiedShow Answer

What is personnel economics?

Correct AnswerverifiedPersonnel economics is the app...View AnswerShow Answer

Despite evidence that companies will find it more profitable to use a commission system of compensation rather than a salary system,many companies continue to pay their workers salaries.Which of the following is one reason why firms choose a salary system?

Correct AnswerverifiedShow Answer

The application of economic analysis to human resources issues is called

Correct AnswerverifiedShow Answer

The wage rate is the opportunity cost of

Correct AnswerverifiedShow Answer

Table 12-2 -Refer to Table 12-2.The marginal profit from hiring the second unit of labour is

Correct AnswerverifiedShow Answer

At low wages,the labour supply curve for most people slopes upward because

Correct AnswerverifiedShow Answer

a.What are the two effects of an increase in the wage rate on an individual's labour supply decision? Briefly explain each effect. b.Explain how a labour supply curve could be backward-bending.

The marginal revenue product of labour is defined as

Correct AnswerverifiedShow Answer

Most economists believe that a small amount of the gap between the wages of white males and the wages of other groups is due to discrimination.Which of the following factors is not another factor that explains part of this gap?

Correct AnswerverifiedShow Answer

Compensating differentials are associated most closely with which of the following?

Correct AnswerverifiedA

The most important factor contributing to wage differences in the labour market is differences in the level of education and training among workers.

Correct AnswerverifiedShow Answer

Which of the following is a reason why some firms do not use commission pay?

Correct AnswerverifiedShow Answer

The marginal productivity theory of income distribution was developed by

Correct AnswerverifiedShow Answer

How will an increase in population affect the labour market?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

What is the difference between a firm's marginal revenue and its marginal revenue product?

Correct AnswerverifiedShow Answer

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Figure 12-4 -Refer to Figure 12-4.Which of the following is true at W₀?

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Personnel economics is the app...
View Answer

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A

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C

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